Metgasco sues NSW government over cancelled gas licence

Gas company
Metgasco
has sued the NSW government to force it to reinstate an exploration licence at a contro­versial site on the north coast.

The Supreme Court case calls for a judicial review of Energy Minister Anthony Roberts’ decision on May 15 to suspend a licence to drill on a former quarry near the small town of Casino.

Metgasco says the decision, taken without notice four days before drilling was to start, was not authorised by legislation and did not give Metgasco procedural fairness. With its share price down by half, Metgasco says it is considering suing for damages, including the $3 million cost of cancelling drilling.

Encouraged by their success in stopping Metgasco, anti-coal seam gas ­protesters have promised to use the same tactics against much bigger coal seam gas projects by
AGL Energy
near Gloucester and Santos in the Pilliga.

Metgasco has said Mr Roberts smeared it saying he would refer to the Independent Commission Against ­Corruption allegations about Metgasco’s shareholders. ICAC on Monday said these allegations were baseless.

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Mr Roberts himself was mentioned at ICAC recently as a guest on the yacht of the Gazal family who allegedly donated to a Liberal Party slush fund.

Mr Roberts, who faces a tight state election next March, said he would contest the case and called on Metgasco to comply with its licence requirements for community consultation.

“The government will continue to vigorously pursue titleholders to ensure they maintain high standards of community consultation," he said.

Consulted extensively

Metgasco says that it lodged a program of community consultations with the minister in December and heard nothing until the evening of May 14, the day after radio broadcaster
Alan Jones
attacked Metgasco on air. The government has not raised any doubts about the safety of the drill site.

Metgasco says that it called all residents within a two kilometre radius of the drill site to a public meeting, published ads in the local papers about its plan and attended meetings at the local council. Peter Henderson, Metgasco's chief executive, said he had consulted but he could not make all locals agree with the plan to drill. “Consultation does not mean agreement," he said.

The company said it was aware a large number of protestors would try to stop drilling but had consulted extensively with the police and Mr Roberts about security.

Local resident Ross Joseph, who lives more than 5km away from the drill site said he and three other residents had spent almost three hours talking with Mr Henderson at a private meeting on 4 March in Metgasco’s office on the north coast but he did not consider this was true consultation.

Mr Joseph said that the head of the Office of Coal Seam Gas Rachel Connell held a town meeting near Casino on 13 May attended by about 50 locals who eventually stormed out of the meeting. He said locals complained application documents incorrectly stated the drilling was for “conventional gas". When Ms Connell said this was a “semantic issue," this provoked a walk out.

Mr Henderson said it was true that the drilling targeted conventional gas but it was possible that it would find so-called “tight" gas which might require techniques such as “hydraulic fracking" to extract. He said it was not a coal seam gas well and the company would need a separate permit and a new round of consultation before it did any fracking.